Pick Top Stocks For 2019, Best Stocks For 2019

Monthly Archives: July 2018

Here at Zacks, we don’t generally classify stocks as “cheap” or “expensive”, and rather than looking at the stock’s face value, we have a system that puts an emphasis on earnings estimate revisions to find stocks that will hopefully be winners for investors.

That being said, low-priced stocks can be attractive to smaller investors that can’t necessarily afford large stakes in companies with higher priced stocks.

When looking at these low-priced stocks, we can look at the same trends in growth, value, and momentum and apply the Zacks Rank to properly analyze the potential that these companies have. We are also keenly aware of the latest sector trends and make sure to cover all of the hottest industries.

Today we’ve highlighted three stocks that fall into the broad “technology” sector. Each of these three stocks is currently trading for less than $10 per share and holds a Zacks Rank #2 (Buy) or better. Take a look at the strong estimate revision activity and other factors that make these tech companies stick out right now:

Top 5 Gold Stocks To Buy For 2019: Elevate Credit, Inc.(ELVT)

Elevate Credit offers online credit solutions—including installment loans, lines of credit, credit building, and credit reporting products—to non-prime consumers. ELVT has emerged as one of our hottest low-priced picks lately, surging more than 24% in the past month. But even with these gains, the stock is trading at a relatively cheap 12.2x forward 12-month earnings. Plus, it should be able to break higher by posting solid earnings results later this month. Current estimates have the company reporting EPS growth of 87.5% for the period. ELVT will also hope to carry its Zacks Rank #1 (Strong Buy) into that report date.

Ericsson is a world-leading supplier in the telecommunications and data communications industries, offering advanced solutions for mobile and fixed networks, as well as consumer products. ERIC is holding a Zacks Rank #2 (Buy) and looks appealing from growth and momentum perspectives. Earnings are expected to improve by more than 135% in the current fiscal year, and the stock has surged more than 22% in the trailing 12 weeks. Still, ERIC is trading with a P/S of just 1.1, which is a nice discount compared to its industry’s average of 1.3.

Top 5 Gold Stocks To Buy For 2019: 21Vianet Group, Inc.(VNET)

21Vianet is one of China’s leading carrier-neutral internet data center services providers. The firm provides hosting and related services, managed network services, and cloud computing infrastructure. VNET is currently holding a Zacks Rank #2 (Buy) and looks like an interesting pick for anyone trying to find strong Chinese tech stocks.

Shares have added a staggering 54% in the past three months but could break higher if 21Vianet lives up to its growth expectations, with current estimates calling for earnings to improve by 83% in 2018. Meanwhile, the company is seeing cash flow growth of 103% right now. Still, with the stock sporting a P/S ratio of just 2.2, investors are clearly getting a solid price at the moment.

Here at Zacks, we don’t generally classify stocks as “cheap” or “expensive,” and rather than looking at the stock’s face value, we have a system that puts an emphasis on earnings estimate revisions to find stocks that will hopefully be winners for investors.

That being said, low-priced stocks can be attractive to smaller investors that can’t necessarily afford large stakes in companies with higher priced shares. When looking at these low-priced stocks, we can look at the same trends in growth, value, and momentum and apply the Zacks Rank to properly analyze the potential that these companies have.

Today we’ve highlighted five stocks that are currently trading for under $10 per share. All of these stocks currently sport a Zacks Rank #2 (Buy) or better, and the selected companies are showing signs of outpacing the market in the current calendar year.

Check out these five great stocks under $10 for 2018:

Hot High Tech Stocks To Own For 2019: Commercial Vehicle Group, Inc.(CVGI)

Commercial Vehicle Group supplies interior systems, vision safety solutions and other cab-related products for the global commercial vehicle market. CVGI is holding a Zacks Rank #2 (Buy) and looks undervalued at its current share price levels. The stock is trading with a P/E of just 5.7, which is a significant discount compared to its industry and the broader market. CVGI also has a P/S of 0.3 and a P/CF of 7.6%—both of which support a value argument. And of course, it is worth noting that CVGI’s earnings are expected to grow by 200% in 2018, so this undervaluation is not necessarily coming during a period of business weakness.

Hot High Tech Stocks To Own For 2019: IEC Electronics Corp.(IEC)

IEC Electronics is a provider of electronic contract manufacturing services, including circuit cards, cable loads, and wire harness assemblies. The stock obviously sticks out because of its Zacks Rank #1 (Strong Buy), but investors might also believe it is undervalued at current share prices for a number of other reasons.

Notably, IEC is trading at just 13x forward earnings, which is sharp discount from its industry’s average of 19.6x. Meanwhile, IEC has a P/S ratio of 0.6, which is also a discount to its industry peers. We should also note that IEC is expected to witness quadruple-digit EPS growth in 2018, and its earnings estimates have trended significantly higher over the past quarter.

Hot High Tech Stocks To Own For 2019: Vuzix Corporation(VUZI)

Vuzix is a supplier of smart-glasses and augmented reality (AR) technologies and products for the consumer and enterprise markets. Its wearable displays are used for 3D gaming, manufacturing training, and military tactical equipment. VUZI is a obviously a member of a trendy growth industry, but the stock is also interesting right now due to its Zacks Rank #2 (Buy).

Vuzix is still in the red, but the company is inching toward profitability and is expected to improve EPS figures by 31% this year and 29% next year. Meanwhile, revenue growth is expected to touch nearly 200% in 2018 and 93% in 2019.

New products and mainstream adaption should continue to fuel these estimates. VUZI still feels like a speculative growth stock that could be volatile, but an improving outlook is signaling that now is a solid time to buy.

Naturally, some of the best alternative energy stocks have pulled back from their highs as investors fear the trend toward these energy sources is slowing down.

That fear, however, is overblown. In fact, some of these alternative energy stocksare now drastically undervalued.

We’ve got one solar energy stock today that’s due for a 420% pop based on its recent performance alone. That’s before you account for the growth on the way.

The fact is, tariffs or no, developers around the world want this technology. It’s clean and efficient, and by now, it’s often the cheapest option. Based on bids solicited last year by Xcel Energy in Colorado, for example, building and maintaining brand new solar and wind plants was cheaper than just keeping up operations for 74% of the country’s existing coal plants.

The U.S. solar tariffs, which wind down by 5% every year, may offset the lower price of solar somewhat in this country, but they won’t be enough to stem the tide of solar, wind, and several other renewable sources.

Many naysayers seem to forget the world is a lot bigger than the United States. Most developed countries are shifting their energy grids without any of the restrictions the United States has put in place.

Top 5 Penny Stocks To Invest In Right Now: Nutrien Ltd.(NTR)

Fertilizer stocks have had a rough go in recent years. So rough, in fact, that even the faintest whiff of a rebound in the second half of 2018 is causing shares of industry leaders to rally. While it’s still too early to say selling prices are moving in the right direction for good, one of the newest companies is also one of the best positioned to capitalize on an improving market.

Nutrien, which was formed from the merger of Agrium and Potash Corporation, is a $34 billion goliath selling all three major agricultural nutrients. The company might be the most important global potash miner, as well as a major player in nitrogen. However, the business is also keen to grow its distribution network and diversify earnings away from nutrient selling prices. So, investors might be surprised to learn that the retail segment generated 35% of adjusted EBITDA last year — more than potash or nitrogen.

That’s only one source of strength for the business. Nutrien is in the process of wringing out $500 million in annual cost savings from the merger, having achieved $150 million in the first quarter of 2018. Meanwhile, it’s also selling its equity stake in Chilean lithium miner Sociedad Quimica y Minera de Chile, brought to the merged company by Potash Corporation. The sale is expected to generate at least $4 billion in net proceeds, which could halve the company’s total long-term debt. That would bring its debt-to-equity ratio well below peers’ and closer to the marks set by creditors. Combined with cost savings and the potential for higher selling prices, this would make the fertilizer leader well positioned to capitalize on a potential market rebound. Throw in a healthy 2.9% dividend yield, and investors may want to give this one a closer look.

Our favorite penny stocks for July have the potential to generate considerable return. In fact, our top penny stock to buy could jump over 60%.

Here are our top penny stocks for July…

Top 10 Growth Stocks To Own Right Now: Digital Realty Trust Inc.(DLR)

It can be difficult for dividend investors to find an income payer that offers a high yield, the opportunity for growth, and a level of security. One way to narrow the field is by looking among a group of companies that have qualified for special tax treatment known as real estate investment trusts (REITs). These tax-advantaged businesses are required by the IRS to pay out at least 90% of their profits to investors as dividends.

One such REIT with a long runway is Digital Realty Trust, a company focused on the growing field of data centers, which are large, specialized buildings that house the servers and other network equipment used in cloud computing. These locations require highly reliable and secure environments that contain redundant backup systems for mechanical, cooling, electrical, and network connections — all necessary to protect the data stored on the servers.

IMAGE SOURCE: DIGITAL REALTY TRUST.

The market is large and growing, with worldwide public cloud revenue expected to grow to $411 billion by 2020, up from just $260 billion last year. Ongoing developments in the areas of artificial intelligence, the Internet of Things, self-driving cars, and virtual and augmented reality are expected to accelerate the need for additional data centers in the coming years.

Digital Realty provides over 200 data centers in 12 countries and 32 metropolitan areas, totaling 32 million rentable square feet. The company has built in annual rent increases of between 2% and 4%, and its average remaining lease is 4.9 years.

Even more impressive is the company’s growth. It has increased its FFO (funds from operations — the REIT measure for earnings) by 12.3% annually over the past 12 years. Digital Realty Trust has grown its dividend at about the same rate, and its payout currently yields 3.6%.

The company’s customer list reads like a Who’s Who of the tech and telecom industries, boasting IBM, Facebook, Verizon, AT&T, and Comcast among its top clients.

With a high yield, a significant runway for growth, and a stable and growing payout, Digital Realty Trust is a top stock to buy now.

Top 10 Growth Stocks To Own Right Now: Match Group, Inc.(MTCH)

Match Group’s stock also easily crushed the market with a 125% gain over the past 12 months. Match owns several well-known dating apps, including Match, Tinder, OKCupid, and Plenty of Fish, and generates revenues from display ads and paid subscriptions. Its total paid subscribers grew 26% annually to 7.4 million last quarter, with Tinder’s premium members accounting for 3.5 million of that total.

Match, which was spun off by internet media company IAC in 2015, is the 800-pound gorilla of online dating. However, Facebook’s recent introduction of a dating feature caused many investors to question the width of Match’s moat. Match subsequently struck back by launching a new "gamified" dating app called Crown, acquiring a stake in NYC-based dating app Hinge, and introducing new interest-based features for Tinder.

Match’s revenue rose 19% last year, but its adjusted earnings dipped 19% due to tax reform-related charges. Wall Street expects its revenue to rise 27% this year as its earnings rebound 106% from that temporary dip. That’s a solid growth rate for a stock that trades at just 29 times this year’s earnings, but analysts expect its earnings growth to decelerate to 19% next year.

Top 10 Growth Stocks To Own Right Now: Sage Therapeutics, Inc.(SAGE)

Sage Therapeutics isn’t profitable and has no products on the market. But with the biotech’s market cap standing at more than $7.3 billion, investors are obviously expecting the situation for Sage to change dramatically in the not-too-distant future. I think those expectations will be met.

The U.S. Food and Drug Administration (FDA) is set to make an approval decision for Sage’s lead candidate, an intravenous (IV) version of brexanolone, by Dec. 19, 2018. If all goes well, the drug will become the first therapy approved by the FDA for treating postpartum depression.

I think the chances for FDA approval are quite good based on the phase 3 clinical results for brexanolone. And if the IV formulation of the drug is successful, that bodes well for Sage’s followup — SAGE-217, an oral drug that’s similar to brexanolone. The biotech is moving forward with a pivotal phase 3 study of SAGE-217 as a major depressive disorder treatment and expects to announce results in the fourth quarter of this year.

Sage could be looking at peak annual sales of $775 million for brexanolone and $2.5 billion for SAGE-217. I think the potential for these two drugs makes this biotech an attractive acquisition target.

Top 10 Growth Stocks To Own Right Now: Tencent Holdings Limited(TCEHY)

Tencent Holdings Ltd (OTCMKTS:TCEHY) is a true stock legend. The tech giant is the first Chinese company to be valued at over $500 billion. This puts it in the same league as major U.S. stocks like Facebook. And according to the Wall Street Journal, TCEHY “isn’t yet a household name in the U.S., but it should be.”

The company has its fingers in many pies from a hugely successful gaming business to music and videos. But Tencent wouldn’t be Tencent without WeChat. This is an extremely popular Chinese messaging app with almost 1 billion users. Think of a juiced-up version of WhatsApp that includes payment systems, smart city offerings such as the ability to schedule appointments, pay traffic fines or make visa applications.

“Tencent dominates consumer engagement and has a variety of tools for businesses to reach consumers,” writes KeyBanc’s Hans Chung. “It has been cautious about monetization, but we believe the opportunity is huge and achievable given the largest scale and engagement in China.” Indeed, Wells Fargo’s Ken Sena is particularly enthusiastic about the potential in video revenue and predicts a surge of video subscribers in the next five years.

From our data we can see that this ‘Strong Buy’ stock scores three recent Buy ratings from the Street. This is with an average price target of $65 (29% upside potential).

We’re now just past the halfway mark of the year, which means businesses will soon be announcing second-quarter 2018 operating results. But investors don’t necessarily have to wait for management teams to hop on quarterly earnings conference calls to know if a stock is a buy this July.

Sometimes a high-yield stock gets punished without good reason, Sometimes an industry leader is quietly positioning itself to exploit a market rebound, and sometimes it’s just tough to pass up a global energy leader boasting a 6% dividend yield while it transitions to renewable energy fits that bill. Here’s why they’re my top stocks to buy in July.

Top Undervalued Stocks To Watch Right Now: International Paper Company(IP)

Entering 2018, International Paper stock had kept pace with the total returns of the S&P 500 over the previous three years. But shares are down 11% year to date just past the halfway mark. That sets up an intriguing opportunity for long-term investors with an appetite for dividends, as the stock currently yields 3.6%. Management has big plans for increasing that over time.

As one of the leading manufacturers of cardboard and with a stable of low-cost production facilities in North America, International Paper has expertly exploited the growing trend of online shopping in the last decade. In the last five years, the business has averaged $1.9 billion in free cash flow. Management intends to deploy 40% to 50% of that in efforts to create shareholder value, either through share buybacks or dividend increases (or lately, both).

While a massive deal to acquire peer Smurfit Kappa was abandoned in early June, there are still other long-term growth opportunities for investors to look forward to. For instance, International Paper owns part of a joint venture in Russia called Ilim, which just delivered record equity earnings of $92 million in the first quarter of 2018. That compares to $183 million in all of last year. Throw in continued portfolio optimization efforts, together with low-cost production, and the company is poised to keep making progress on its near- and short-term goals while rewarding investors with a hefty dividend.

Top Undervalued Stocks To Watch Right Now: Weight Watchers International Inc(WTW)

Weight Watchers stock has rallied tremendously in the last few years. However, trading at a forward price to earnings ratio of 27, WTW stock is still priced at a reasonably level.

The company reported significantly better than expected first-quarter results, citing strong recruitment trends. Its membership reached a record 4.6 million, and its total paid weeks jumped 27% year-over-year last quarter. Furthermore, the company predicted that its overall revenue would surge almost 20% in fiscal 2018.

A number of analysts were very enthusiastic about the outlook for Weight Watchers in the wake of the results.

For example, SunTrust analyst Michael Swartz started coverage of WTW stock with a $90 price target and a “buy” rating on May 15. According to the analyst, who was upbeat about the company’s strategy, Weight Watcher’s products are “one of the first stops” for someone considering a structured weight loss program, The Fly reported.

Also starting Weight Watchers stock with a “buy” rating was Bank of America’s Olivia Tong. The analyst, who placed a $95 price target on Weight Watchers stock, wrote that the company “has a proven operational model and sustainable momentum,” The Fly noted.

Finally, Craig-Hallum’s Alex Fuhrman expects the company’s summer ads to cause its recruiting trends to accelerate, The Fly noted. He kept a $120 price target and a “buy” rating on Weight Watchers stock.

WTW has excelled at recruiting well-known, highly respected celebrities to endorse its products. Of course, the company has convinced Oprah Winfrey to invest in Weight Watchers stock and tout its products in ads. More recently, the company signed up music producer DJ Khaled and actor Kevin Smith in an effort to appeal to more young people and males.

Judging by Weight Watcher’s first-quarter results, that effort seems to be bearing fruit.

Top Undervalued Stocks To Watch Right Now: Aphria Inc. (APHQF)

Aphria is one of the Canadian marijuana stocks that has experienced a miserable year so far. Its stock is currently down 39% since the beginning of 2018 — and that reflects improvement over the last couple of months.

However, most of the same catalysts for Canopy Growth also apply to Aphria. The company should be a big winner from recreational marijuana legalization in Canada. Aphria is on pace to produce 225,000 kilograms of cannabis annually by early 2019. The company also has a solid retail distribution network thanks to its recent deal with Southern Glazer’s, the largest wine and spirits distributor in North America.

Like Canopy Growth, Aphria has targeted the global medical marijuana market. If U.S. laws change to prevent interference with states that have legalized marijuana, Aphria should be in great shape to jump into the U.S. market because of its relationship with Liberty Health Sciences. It’s even possible that Aphria could join Canopy by moving into the cannabis-infused beverage business: Reports surfaced recently that Molson Coors Brewing is in discussions with Aphria and three other Canadian marijuana growers about a potential deal.